Switching gives more power to your pocket

Switch gas supplier and save £60 a year. Change electricity company and save £30 a year. Switching both can save you £100. Melanie Wright explains

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12:00AM BST 28 Oct 2000

CHANGING your gas and electricity supplier is often better than staying with your existing provider.

Heat and light: by switching provider and saving energy, you can expect to cut your bills significantly

As a general rule, traditional utility companies do not offer the cheapest deals; newer competitors seem keener to drum up business.

Our diagram, "How to trim your electricity bill", shows that the typical annual saving which can be made by changing electricity provider is around £30. For example, someone living in South Wales who has SWALEC as their regional supplier could save £28 a year by changing to npower. The annual bill with SWALEC for a medium user on standard rate electricity would cost £286, compared to £258 with npower.

Bigger savings can be made by changing gas supplier. For example, a gas user could save £63 a year by switching from BG to Powergen.

According to Ofgem (the Office of Gas and Electricity Markets), nearly five million people have switched electricity provider since the electricity market was opened up to competition just over a year ago, and the same number of people have changed gas providers in the four years of gas competition.

Callum McCarthy, director general of Ofgem, said: "These figures show how healthy competitive markets in gas and electricity are. Most customers have welcomed competition and, of those who have already switched electricity suppliers, 80 per cent found the process easy.

"The gas market paints a similar picture. By switching gas suppliers, people can save up to £60 a year, and by switching electricity, they can save £30 a year. By switching both, they can save up to £100."

So how easy is it to change providers? First, you need to do some research on the various deals available. A spokesman for Powergen said: "The internet is a really good place to start. Some sites have easy-to-use cost calculators and can give a good indication of how much you can save. There are also benefits for signing up online.

"For example, with Powergen you will get a cheque back for £50 if you sign up with us for gas, electricity and the telephone service, or £15 per product if you don't want all these."

Ofgem says that if you are thinking of switching, you should first find out how much you spent on gas and electricity during the last year, as this will help you compare prices. Next, you should ask for suppliers' prices and what savings are available for different payment methods - for example, it is usually cheaper to pay your bill by monthly direct debit.

A spokesman for Ofgem said: "If you agree a contract, either on the doorstop or on the telephone, the supplier should contact you within a fortnight to make sure you understand that you have made a contract and that you are happy with the way the sale was made. If you aren't, then you have the right to cancel the contract."

Contrary to what some fear, no new pipes, meters or cables are needed. All it involves is signing a form from the new provider, who will then sort everything out on your behalf.

An estimated six million households in Britain spend more than 10 per cent of their disposable income on fuel. StayWarm is a low-cost fixed payment gas and electricity service designed to tackle the problem of fuel poverty. This week, StayWarm announced that it is rolling out into some of the country's most affected areas: the North East, East Midlands and West Midlands.

Richard Nickels, head of social business at TXU Europe, which runs the service, said: "It is an unacceptable fact of life that more than 30,000 people are dying every winter as a result of insufficient heating in their homes. Britain has the highest rate of cold-related deaths among people aged 65-74 - higher than other European countries - for example, Finland, Germany and the Netherlands. This service is a serious attempt to address this problem."

The scheme has a fixed payment system, where the payments are based on the number of bedrooms and occupants in each household. There are no bills, and payments remain the same regardless of how much energy is used, even in the coldest winter months.

StayWarm claims that, on average, pensioners can save around £150 a year on their heating bill by signing up to the scheme. A single pensioner in a one-bedroom flat presently spending £7 a week on energy can typically save £2 a week. These prices are based on the "average" consumer and are compared with the most commonly used energy supplier in each area.

Marsha Singh, MP for Bradford, said: "People are having to make agonising decisions between heating the home and other essentials such as food. We also know that the most vulnerable to cold are the elderly, the very young and the long-term sick. This is a ground-breaking initiative to help those who we would class as "fuel-poor".